Maryland International College
School of Graduate Studies
RESEARCH PROPOSAL
ON
EFFECTS OF DISTRIBUTION CHANNEL MANAGEMENT ON SALES
PERFORMANCE: A CASE OF ETHIO TELECOM ADISS ABEBA CITY
ADIMINISTRATION GRAND POINT OF SALES.
BY:
Asabe Azmeraw Yenesew
ID No.: 027/2013
Nov 2022
Addis Ababa Ethiopia
INTRODUCTION
1.1 BACKGRAWND OF THE STUDY
A distribution channel is a chain of businesses or intermediaries through which a good or service
passes until it reaches the final buyer or the end consumer. Distribution channels can include
wholesaler, retailers, distributors, and even the internet. Distribution channels are part of the
downstream process.
Channels are broken into two different forms—direct and indirect. A direct channel allows the
consumer to make purchases from the manufacturer while an indirect channel allows the
consumer to buy the goods from a wholesaler or retailer. Indirect channels are typical for goods
that are sold in traditional brick-and-mortar stores.
Generally, if there are more intermediaries involved in the distribution channel, the price for a
good may increase. Conversely, a direct or short channel may mean lower costs for consumers
because they are buying directly from the manufacturer.
While a distribution channel may seem endless at times, there are three main types of channels,
all of which include the combination of a producer, wholesaler, retailer, and end consumer.
The first channel is the longest because it includes all four: producer, wholesaler, retailer, and
consumer. The wine and adult beverage industry is a perfect example of this long distribution
channel. In this industry—thanks to laws born out of prohibition—a winery cannot sell directly
to a retailer. It operates in the three-tier system, meaning the law requires the winery to first sell
its product to a wholesaler who then sells to a retailer. The retailer then sells the product to the
end consumer.
The second channel cuts out the wholesaler—where the producer sells directly to a retailer
who sells the product to the end consumer. This means the second channel contains only one
intermediary. Dell, for example, is large enough to sell its products directly to reputable retailers
such as Best Buy.
The third and final channel is a direct to consumer model where the producer sells its product
directly to the end consumer. Amazon, which uses its own platform to sell Kindles to its
customers, is an example of a direct model. This is the shortest distribution channel possible,
cutting out both the wholesaler and the retailer. A distribution channel, also known as placement,
is part of a company's marketing strategy, which also includes the product, promotion, and price.
Not all distribution channel work for all products, so it's important for companies to choose the
right one. The channel should align with the firm's overall mission and strategic vision including
its sales goals.
The method of distribution should add value to the consumer. Do consumers want to speak to a
salesperson? Will they want to handle the product before they make a purchase? Or do they want
to purchase it online with no hassles? Answering these questions can help companies determine
which channel they choose.
Secondly, the company should consider how quickly it wants its product(s) to reach the buyer.
Certain products are best served by a direct distribution channel such as meat or produce, while
others may benefit from an indirect channel. If a company chooses multiple distribution
channels, such as selling products online and through a retailer, the channels should not conflict
with one another. Companies should strategize so one channel doesn't overpower the other.
The three types of distribution channels are wholesalers, retailers, and direct-to-consumer sales.
Wholesalers are intermediary businesses that purchase bulk quantities of product from a
manufacturer and then resell them to either retailers or—on some occasions—to the end
consumers themselves. Retailers are generally the customers of the wholesalers and offer high-
touch customer service to the end customers. Lastly, direct-to-consumer sales occur when the
manufacturer sells directly to the end customer, such as when the sale is made directly through
an e-commerce platform.
1.2 STATEMENT OF THE PROBLEM
A distribution channel is a path by which all goods and services must travel to arrive at the
intended consumer. Conversely, it also describes the pathway payments make from the end
consumer to the original vendor. Distribution channels can be short or long, and depend on the
number of intermediaries required to deliver a product or service.
Goods and services sometimes make their way to consumers through multiple channels a
combination of short and long. Increasing the number of ways a consumer is able to find a good
can increase sales. But it can also create a complex system that sometimes makes distribution
channel difficult. The term “distribution channel” refers to the methods used by a company to
deliver its products or services to the end consumer. It often involves a network of intermediary
businesses such as manufacturers, wholesalers, and retailers. Selecting and monitoring
distribution channels is a key component of managing supply chains. These a key ways are
forecasting and managing the risk of the organization .But the problem is mostly occur in
distribution channel management practice and system. Therefore, the problem in relation with
distribution channel management system is inadequate supervision on old and familiar technique,
lack of responsible to evaluate the capacity of the workers.
Marketing channel decisions are one of the most complex and important decisions that management faces
today. If one looks at the major strategy of the marketing mix (product, price, promotion and
distribution), the greatest potential for achieving a competitive advantage now lies in distribution.
Distribution is an inseparable part of marketing decisions and involves all the decisions about distribution
of products to the consumers or the end user. Distribution still offers a new frontier for competing
successfully, especially if the emphasis is show more content. This perspective draws attention to those
members (e.g. wholesalers, distributors, retailers, etc.) comprising the distribution system and engaged in
the delivery of goods and services from the point of manufacture to the point of consumption. The
management of such institutions through marketing channel management involves the planning,
organizing, coordinating, directing and controlling efforts of channel members.
In this effort, topics such as channel structure, power/conflict, environmental issues, and relational
dimensions have been studied thoroughly. However, the concept of channel strategy, as well as other
aspects related to distribution management has received little attention. Channels research has typically
taken a manufacturer perspective. That is, how channels should be organized and on-going channel
relationship should be managed are normally addressed from the manufacturer’s point of view, such as
whether or not to use integrated channels and how power should be used to coordinate exchanges.
1.3 OBJECTIVES OF THE STUDY
1.3.1 General Objectives
The study will help to understand the organization that proper channel management makes the
difference between survival and failure, management costs improve the company’s fairly stable
earnings, profits and satisfaction of the firm’s sense of social responsibilities, Techniques of
channel management.
1.3.2 Specific Objectives
The specific objective of the study will;
To review the concepts of philosophies, policies, procedures and techniques of channel
management
To examine the working &functioning of Ethio telecom and speculative channel
management practices.
To study the channel management planning, policies, and producer techniques of the
organization.
To evaluate the impact of channel management techniques on the performance of the
organization.
To identify the basic problems and suggest suitable recommendations to improving the
financial channel management planning polices procedures and techniques of Ethio
telecom. Its crucial issue for the survival and development of the organization.
1.4 SIGNIFICANCE OF THE STUDY
The researcher hope that the study will help at all those who deal with the information’s related
to channel management practice of Ethio telecom Addis Ababa city administration grand point of sales,
this research will mainly use for:-
Management bodies through providing necessary information about channel management
practice of Ethio telecom.
Other users like agents and final user of the product/customers and
This study can also be used as a reference for further studies.
1.5 SCOPE OF THE STUDY
The scope of the study will planned to a manageable size for the sake of time and resource
constraints, for this reason, the study will limit to policies and procedures used in distribution
channel management which is currently practice in Ethio telecom. It also limited to the financial and
operational aspects of distribution channel and their performance in Ethio telecom Addis Ababa city
administration grand point of sales.
1.6 LIMITATION OF THE STUDY
The following are factors that will affect the accomplishment of this paper and beyond the
capacity of the researcher:
Finance –time and money is the major factor that restricts the reliability of the
research.
Respondent- lack of willingness by employees in answering the questionnaires.
Lack of reference books.
1.7 RESEARCH QUESTION
The study will try to investigate effects of distribution channel management on sales performance of
Ethio telecom Addis Ababa city administration grand point of sales in answering the following
questions;
What is the contrast to the upstream process?
How do we get our product to the consumer?
Do we know the supply chain?
Who are our suppliers?
1.8 ORGANIZATION OF THE RESEARCH
The research paper consists four chapters; the first chapter discus about introduction and design
of the study: background of the study, statement of the problem, research questions, research
objectives, and hypothesis of research, significance of the study, the scope and limitations of the
study The second chapter deals with the review of literature: The literature survey includes the
conceptual literature and empirical studies. The all theories tending to support this study was
incorporated in the review of literature. The third chapter discus about research methodology:
Under this chapter, the research methodology and the details of data source and methods of data
collection, sample size determination, sampling design techniques, and methods of data analysis
and reliability test are presented. Finally, the last chapter provides summery, conclusion of major
findings, and suggestions for future research.
